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Cairngorms National Park

Supplementary Planning Guidance
Affordable Housing

Consultation Draft
May 2010

Planning in the Cairngorms National Park

The Cairngorms National Park is the largest National Park in the UK, encompassing
areas of Highland, Aberdeenshire, Moray and Angus. A Scottish Government consultation 
is taking place for extending the boundary into Perthshire, towards the end of 2010.

Planning in the Cairngorms National Park􀀁is unique. It involves the Cairngorms 
National Park Authority (CNPA) working alongside the Local Authorities, who continue 
to deal with many of the planning applications within their respective areas. All 
planning applications submitted must comply with all the policies in the Cairngorms 
National Park Local Plan (once adopted) and any relevant Supplementary Guidance.

Any planning application should be submitted to the relevant Local Authority in the
normal manner. The Local Authority checks to ensure all the necessary information is 
supplied and registers receipt of the application. The CNPA is informed by the Local 
Authority and then has 21 days to decide whether to call-in the application. Only 
applications which are of general significance to the aims of the Park are called-in. 
Thereafter the CNPA determines the application. In instances when planning applications 
are not called-in, the Local Authority continues to act as the planning authority. This 
supplementary guidance sets out detailed advice to help you meet the requirements of the 
policies in the Cairngorms National Park Local Plan. It is recommended that it is read in 
conjunction with other relevant guidance, such as the Sustainable Design Guide.

1.0 Background

1.1 This guidance provides additional information relating to contributions to affordable 
housing, as outlined in Policy 19 in the Cairngorms National Park Local Plan.

Policy 19 Contributions to Affordable Housing

Developments of three or more dwellings will be required to incorporate a proportion 
of the total number of units as affordable housing. Development solely for affordable
housing will be favourably considered. Where public funding is available to help provide
affordable housing, between 25% and 40% of all units will be expected to be affordable. 
Where less than one third of the total cost of the development is available through public
funding, the developer will be required to provide 25% affordable housing on a site.
Proposals for one and two open market dwellings will also be required to make a contribution
towards affordable housing, This will be a cash payment towards the meeting of housing
need in the local area. Proposals for off site contributions will be considered where community 
needs assessments, or similar assessments, support this as a better way of meeting the housing 
needs of the community.

1.2 The provision of affordable housing is a key priority within the Cairngorms National Park,
and this guidance outlines how the Local Plan policy on affordable housing will be delivered,
in order to assure adequate future provision of affordable housing in the Park.

1.3 The policy is intended to ensure that there are a wide range of housing options for 
households in the Park. The increased range of affordable housing options and numbers of units 
that would be delivered through this policy will change the availability of housing for potential
occupants who cannot currently access open market housing.

2.0 Introduction

2.1 Research demonstrates that there is a lack of affordable housing units to meet the needs 
of the Park’s communities. This issue was also highlighted as a priority in the Cairngorms 
National Park Plan 2007-2012.

2.2 This situation led to the need for a specific policy in the Local Plan to address the 
provision of affordable housing, and how this will be achieved. The policy seeks to secure 
a mix of onsite affordable housing, within housing developments also containing open market 
housing; opportunities for the provision of affordable housing units off-site, where assessments
have shown this is the best to meet the needs of the community; and financial contributions to 
the provision of affordable housing units.

2.3 This guidance sets out how all housing development proposals will be assessed against this
policy. It advocates the use of a model to assess proposals for three or more dwellings on any
one site.

3.0 Definition of Affordable Housing

3.1 For the purposes of the Local Plan and this guidance, the following definition of 
Affordable Housing, as set out in Scottish Planning Policy (2010), is to be used at all times:
‘Housing of a reasonable quality that is affordable to people on modest incomes.’

4.0 Assessment of proposals

4.1 To ensure the economics and viability of all developments are fully considered, all 
proposals for developments of three or more dwellings on any one site will be assessed
using a residual land value model.

4.2 This model provides the planning authority with an assessment of the economics of
residential development for specific schemes. It allows the planning authority to test the
economic implications of different types and amounts of planning obligation and, in
particular, the amount and mix of affordable housing. A range of different assumptions
within the model, including house prices, use of public subsidy, density and build costs can be
altered to fit specific locations for development and the results generated can be compared.

4.3 The model is an aid in the decision making process. It must be made clear that the model
itself does not make decisions. It gives information about the economics of development,
along with a range of other factors about the site, which can be taken into account when
making decisions about proposed schemes. This can be used at pre-application negotiation
stage, an application for planning permission in principle or a full planning application.
4.4 The model compares the potential revenue from a site with the potential costs of 
development before a payment for land is made. In estimating the potential revenue, the income 
from selling dwellings in the market and the income from producing specific forms of affordable
housing are considered. The estimates involve (1) assumptions about how the development
process and the subsidy system operate and (2) assumptions about the values for specific
inputs such as house prices and building costs. Where there is evidence to show that the
assumptions used in the model are not appropriate for a specific development, different
information can be fed into the model, or the information can be used to help interpret the
results.

4.5 For some inputs, such as house prices and building costs, the model has ‘default’ values. 
In this case the house prices used are the ones in the affordability model. Build costs are
based on data from the Royal Institute of Chartered Surveyors (RICS) Build Cost Information

Service for Highland and Grampian.

4.6 The main output of the model is the residual value. This is the sum of money that is 
available to be shared between the developer and the landowner. It is a surplus that remains 
after all development costs, except land costs, have been met from revenue. Development costs
include a standard return for the developer and contractor. The residual value will have to
cover the costs of land acquisition. Any surplus remaining after land acquisition becomes
‘supra-normal’ profit. The residual value is not the same as the land costs, although land costs
will normally have to be met from the residual. So, for development to be economically
viable the residual must be large enough to at least cover the cost of acquiring the site.

4.7 The model tests the sensitivity of the residual value to different input values. This 
enables an assessment to be made of how different amounts of affordable housing, higher or 
lower house prices or higher or lower build costs, influence the residual value. The residual 
value is estimated at a given point in time. If in the future input values change before a 
development has been completed, the value of the actual residual may be higher or lower than
the residual value estimated by the model. For example, if house prices rise and all other 
items remain the same the value of the residual will rise. Whilst the model cannot predict, 
it can assess assumptions made on future input values and the effect on the residual value.

4.8 The planning authority will make a judgement about the size of the residual for each site, 
but it will always need to be large enough to cover the cost of land acquisition. This cost is
neither an input to nor an output from the model – it is site specific. The model estimates the
impact on the residual of the provision of affordable housing, and will be important in
determining the percentage of affordable housing required on any specific site.

4.9 Whilst this approach does not provide a clear statement of what percentage requirement will
be needed on each site, it does enable a variety of options to be considered. This will help
ensure that the provision of affordable housing is forthcoming, and that there is an economic
return for the developer.

5.0 Development of sites solely for affordable housing

5.1 The development of sites solely for affordable housing, whether by registered social
landlords or by alternative measures, will be favourably considered, providing the requirements
of other policies in the Local Plan are met.

6.0 Cash Contributions for the provision of affordable housing

6.1 Where proposals are made for the development of one or two open market dwellings, or
where evidence demonstrates that onsite / offsite provision by the same developer is not
appropriate, the developer will need to make a cash contribution towards the delivery of
affordable housing in another location.

6.2 The cash payment will be ring fenced for the provision of affordable housing.

6.3 The means by which the amount of payment will be calculated, and how the affordable
housing will be delivered, are contained in the supplementary planning guidance on
Developer Contributions.

7.0 Off-site contributions

7.1 Where community needs assessments, or other assessments of the situation in a given locality,
demonstrate that the provision of affordable housing is more suited on a different site, this
will be considered.

7.2 A proposal that incorporates an element of off-site provision of the affordable housing
requirement for the given site will only be granted planning permission, when details of how
the housing is to be delivered have been agreed. The development of both sites will be
subject to a legal agreement to ensure that the affordable housing element of the development
is built within an agreed timeframe.

8.0 Delivery of Affordable Housing

8.1 Anyone considering developing a site for housing is strongly encouraged to seek advice from
planning officers about what the requirements for any given site will be, as soon as possible,
and preferably before a site is purchased.

8.2 All planning applications must be accompanied by details of who will provide the affordable
housing units, whether this is a private developer, registered social landlord, or other.

8.3 If a developer knows that the site on which they are seeking planning permission is included
in either a Council or Registered Social Landlord investment programme, evidence of this
must be submitted with the planning application.

9.0 Further Information

9.1 It is recommended that the following other sources of advice are read in conjunction with this
guidance.

Scottish Government
www.scotland.gov.uk/planning
Scottish Planning Policy
http://www.scotland.gov.uk/Publications/2010/02/03132605/0
Cairngorms National Park Authority
www.cairngorms.co.uk
Supplementary Planning Guidance
Developer Contributions
Sustainable Design Guide